The OECD BEPS project has brought significant changes to the international tax system and the regulation of cross border transactions in particular. The OECD has recognised that these changes will lead to an increase in controversy, and has encouraged dispute resolution through the mutual agreement procedure (MAP), and dispute prevention through advance pricing agreements (APAs).
The use of APAs and MAP is likely to become increasingly relevant for taxpayers as countries come under more and more pressure from the OECD to resolve their MAP cases within the 24 month period prescribed under the BEPS Action 14. It is therefore essential that multinational enterprises (MNEs) have strategies in place such as these to manage disputes, or prevent them from arising in the first place. Taxpayers should, if they have not already done so, reconsider their use of these tools in a proactive strategy fit for the post BEPS environment.
Faced with uncertainty and/or double taxation, the decision of whether an APA is appropriate or whether to pursue MAP will of course be unique for every company, country, and transaction. A number of factors should be considered, including strategic considerations and local knowledge beyond the stated rules. As a result of recent developments, and as tax authorities interact ever more closely with each other, there are new paths ahead that make entering into an APA and accessing MAP the favourable strategy for taxpayers.
We trust you will find this guide to be a valuable resource, please reach out to local DLA Piper tax contacts to discuss this or other related topics further.
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Download the full APA & MAP Country Guide 2018
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